DOL: Nearly Half Of Workers Participate In Retirement Plans

August 14, 2003 (PLANSPONSOR.com) - Nearly half (48%) of all American workers participated in their employer-sponsored retirement benefit in 2000.

Leading among employee participation was the 36% chipping into their defined contribution (DC) plan, compared with only 19% that participate in a defined benefit (DB) option. Looking across a cornucopia of worker characteristics showed the greatest participation rates for each plan to be among union workers in DB plans (69%) and professional, technical and related employees in the DC option (53%), according to the Department of Labor’s (DoL) National Compensation Survey (NCS) of Benefit Incidence.

The participation results were as varied as the workers that they are offered to. The greatest prevalence of overall participation in retirement benefits broken down by worker characteristic was found among union workers at 83%, with DB plan participation rates overwhelmingly more popular than their DC counterparts (69% versus 38%). Comparatively, nonunion workers had a participation rate of 44%, with a much stronger leaning toward DC plans (36%) than DB (14%). Across the board, overall retirement plan participation rates were found to be:

  • professional, technical and related employees (66%)
  • full-time employees (55%)
  • clerical and sales employees (50%)
  • blue-collar and service employees (39%)
  • part-time employees (18%)

With the exception of union workers, every other employee group had greater participation rates in DC plans, versus their DB complement. After professional workers (53% and 27%), the next highest participation rate was found in full-time workers (42% and 22%), followed by:

  • clerical and sales (40% and 18%)
  • blue-collar and service (27% and 17%)
  • part-time (12% and 6%)

Breaking it down by establishment characteristics revealed the highest participation rates among those firms with 100 or more workers (65%), with DC plans ahead of DB plans (46% to 33%). On the other hand, their smaller peers had overall participation rates of 33%, spread more to the DC side (27%) than the DB (8%).

Further, while goods-producing companies had higher participation rates than service producing (57% versus 45%), this rate was found to be completely concentrated in DC plans (44%) as the DoL recorded no participation in DB plans for these companies. Comparatively, service-producing participation was spread across both DC plans (33%) and DB plans (18%).

Examining other types of benefits, the DoL found paid vacations to be the most prevalent among private employees, available to 80% of employees and paid holidays to 77%. These benefits were found to be very prevalent across all worker characteristics, with only part-time employees under 70% coverage.

Also found to have a large participation rate in 2000 was medical care plans, with 52% of employee participating in them. As with most other types of benefits, union employees were found to have the largest participation rate at 75%, followed by professional employees (64%) and then full-time workers (61%). Coming in at a 50% participation rate or below was:

  • clerical and sales (50%)
  • nonunion (49%)
  • blue-collar and service (47%)
  • part-time (13%)

Of the 52% of private sector workers with medical care coverage, premiums were fully paid by the employer for 32% of those with single coverage plans and 19% of those with family coverage. The majority of medical plan participants were required to contribute a flat monthly amount, averaging $54.40 for single coverage and $179.75 for family coverage.

Payments of premiums for medical care coverage also varied by employee characteristics. Nearly four out of 10 (38%) of blue-collar and service workers covered by medical care benefits had their coverage fully paid for by their employers, compared with 25% of professional employees and 28% of clerical and sales employees.

Lesser Offerings

Also available to over half of all employee in private industry was life insurance, at a 54% participation rate. Broken down by participation rates among employee characteristics showed:

  • union (82%)
  • professional (76%)
  • full-time (65%)
  • clerical and sales (52%)
  • nonunion (51%)
  • blue-collar and service (47%)
  • part-time (11%)

Other benefits frequently offered in private industry include non-production bonuses (48%) and work-related educational assistance (38%). However, in non-production bonuses the greatest participation was found in professional workers (52%), followed by full-time and union with 51% each. All other groups fell below a 50% participation rate.

Short- and long-term disability benefits were less common; they were available to 34% and 26% of employees, respectively. That number was similar to the percentage of employees (29%) that were offered dental insurance. Other benefits less available to employees:

  • severance pay (20%)
  • wellness programs (18%)
  • job-related travel accident insurance (15%)
  • fitness centers (9%)
  • long-term care insurance (7%).

The 2000 NCS benefits incidence survey obtained data from 1,436 private industry establishments, representing over 107 million workers; of this number, nearly 86 million were full-time workers and the remainder, nearly 22 million, were part-time workers. A more complete set of data can be found at http://stats.bls.gov/news.release/ebs2.nr0.htm .

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